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updated 10/5/2012 1:14:20 PM ET 2012-10-05T17:14:20

HARDBALL
October 4, 2012

Guests: Judith Browne-Dianis, James Lipton, Willie Brown

CHRIS MATTHEWS, HOST: The day after.

Let`s play HARDBALL.

Good evening. I`m Chris Matthews back in Washington.

"Let Me Start" tonight with two big questions, hardball questions, if
you will. One, why? Why did what happened last night happen? Why did a
president who`s proven himself as a policy expert and world class
politician let the other guy take charge? Because if he can`t answer that
question, he may be doomed to defeat in the remaining two debates.

Second big question, can a victory over the facts of last night`s
debate, what was true and what was not, turn the tables now? Can Barack
Obama win by getting out the word he didn`t get out last night?

And both are big questions tonight that might just decide this
presidential election. I`m joined right by Governor Ed Rendell and Ron
Reagan, both MSNBC analysts.

Gentlemen, I want you to look at this. It`s a very tough blog by a
guy, although he`s a conservative, has been very strong for Obama over the
years, Andrew Sullivan of the DailyBeast. He wrote this last night,
basically just at the end of the debate.

Quote, "This was a disaster for the president for the key people he
needs to reach, and his effete, wonkish lectures may have jolted a lot of
independents into giving Romney a second look. Obama looked tired, even
bored. He kept looking down. He had no crisp statements of passion or
argument. He wasn`t there. The person with authority on that stage was
Romney, offered (ph) it by one of the lamest moderators ever and seized
with relish. This was Romney the salesman, and my gut tells me he sold a
few voters on a change tonight. It`s beyond depressing, but it`s true."

Gentlemen, that`s a tough assessment. It`s matched by this -- I`m
showing you one of the strongest headlines, a full banner here, basically
giving it completely to Romney last night.

Governor Rendell, you`ve been in a lot of tough debates. I don`t know
what you thought. I guess -- I`m known as an Obama supporter and I
certainly wanted him to do well last night, and yet I don`t get it. I
don`t quite get it. I thought Romney`s performance -- let`s just call it
that -- was masterful. I don`t know what the president was up to last
night.

Your thoughts.

ED RENDELL (D-PA), FMR. GOVERNOR, MSNBC POLITICAL ANALYST: Well, I
agree with Andrew Sullivan. I think he`s right on in all his points. And
I agree with you. Romney did -- Governor Romney was terrific last night.
He did all the things he had to do to get back in this race.

And I am also mystified at the president`s strategy. You know, Chris,
I`m a good sports fan, as you know. In fact, I even do sports TV and I
write (INAUDIBLE)

MATTHEWS: I know you do. Bagels (ph). Bagels (ph).

RENDELL: And there`s a -- bagels (ph), right. And there`s a great
sports analogy. When you play the prevent defense when you`ve got a lead,
when you try to sit on the ball in basketball when you`ve got a lead, when
you play conservative, what often happens is you lose the lead. And I
can`t for the life of me believe that that`s what they did, but that`s the
only explanation.

They told the president, Don`t be confrontational. They told the
president, Be above it all, act presidential. But the one thing that gets
me -- when I was running for reelection as mayor and when I was running for
reelection as governor and even DA, I had a passion for what we`d
accomplished. I had a passion to explain, where we didn`t accomplish
something, why we didn`t and what the roadblocks were.

And he could have done that without being aggressive, without being
snarky towards Governor Romney. But he could have said, Governor, you
haven`t been there. I`m in this office, and when I took over, the nation`s
financial structure was about to collapse. I did some very difficult
things, and it turned this country`s fate around. We`ve added jobs 31
straight months in a row. We`re moving in the right direction. I
inherited a mess, and I`ve made it better.

He believes that to be true, I know he does, but say it and say it
with some passion.

MATTHEWS: And my question to you, Ron, was, where was the music and
the passion last night of the president? Why didn`t he just go in there
and say, Here`s 15 minutes and a shot (ph). I can talk about anything I
want. Jim Lehrer`s not getting in my way. Why didn`t he say, You know,
here`s why I stuck out my neck for the American auto industry? Because
it`s not just...

RON REAGAN, RADIO TALK SHOW HOST, MSNBC POLITICAL ANALYST:
Absolutely.

MATTHEWS: ... about jobs. I feel the American people like to build
cars. We love cars. It`s in our nature to build them and build the best.
It`s important that guys and women have jobs making cars. It`s important
to who we are as Americans.

Maybe General Motors was good (INAUDIBLE) for America, but damn it,
it`s good to have General Motors, something passionate that would have gone
right to Ohio, to Pennsylvania, to Wisconsin.

RENDELL: Absolutely.

MATTHEWS: They would have said, Damn it, this guy gets how much
thrill I get getting on that line every day and turning out these great
cars that I want to buy.

Why didn`t he -- how about women? We ought to -- a girl ought to know
from the time she`s 16 that her hours are as valuable as the male`s hour of
work. These are passionate things he believes in. He stood there like he
was an observer of Romney`s performance!

I could go on -- I got to let you talk. I could go on. Go ahead.

(LAUGHTER)

REAGAN: You could go on. We might want you to stand in for Barack
Obama.

MATTHEWS: I could do this show alone tonight, actually, but go ahead.

(LAUGHTER)

REAGAN: As you`ve observed, Chris, essentially, last night, two
things happened. One is that the president inexplicably, bizarrely just
failed to show up. And the other thing is that Mitt Romney lied his ass
off.

Now, the White House needs to do something about that first thing.
They need to rectify that. But the second thing that happened gives them
the opportunity to do that, and you can see them pivoting in that direction
today. Today Barack Obama is calling out Mitt Romney`s lies.

But your question is a good one. Why on earth did he not do it last
night?

MATTHEWS: By the way, can George Custer...

REAGAN: How often do you...

MATTHEWS: ... change -- change -- can he attack Cochise after the
battle? I mean, when you lose, you lose, don`t you? I want to get to
that. I mean, I think Custer had a secret plan, but we`ll never know what
it is because he got massacred! Just a thought.

REAGAN: David Axelrod said today that, well, they made a strategic
decision that they weren`t going to fact-check Mitt Romney. Mitt Romney`s
entire campaign is based on mendacity! Their convention was themed on a
lie! Might I submit to you that fact-checking him might be the right way
to go?

MATTHEWS: I agree. And I hate the word "lie" because it`s
(INAUDIBLE) discussion, but so many things last night had nothing to do
with Mitt Romney`s reality even the last couple days.

Anyway, the president had opportunity after opportunity, we think, to
go after Romney on his policies, on the points he was making, but he wasn`t
taking the bait.

Here are some issues he could have pounced on Romney for. Let`s
watch.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R-MA), FMR. GOV., PRESIDENTIAL NOMINEE: I will not
reduce the taxes paid by high-income Americans.

With regards to young people coming along, I`ve got proposals to make
sure Medicare and Social Security are there for them without any question.

But number one, pre-existing conditions are covered under my plan.

We`ve had 43 straight months with unemployment above 8 percent. If
I`m president, I will create -- help create 12 million new jobs in this
country with rising incomes.

(END VIDEO CLIP)

MATTHEWS: Governor, I don`t know how he got away with it. and again,
I`m with Ron and you, I don`t know why the president didn`t say it. He
wants to get rid of the estate tax. The wealthiest people that got a
quarter billion bucks in the bank, they want to keep it for their kids when
they`re gone. That`s for the rich. Forty-seven percent -- he said people
on Social Security are a bunch of bums and parasites. Now he`s saying, I
just want to save what they have.

And this thing about pre-existing condition -- he didn`t tell the
truth last night. He doesn`t have a plan to cover it.

REAGAN: He lied.

MATTHEWS: His guy -- his guy came out afterwards and made sure --
Fehrnstrom said he didn`t mean to say that because he only meant people who
already had a policy. Obviously, they do get coverage. Your thoughts. Go
at it -- go at it, Governor.

RENDELL: Well, Chris, the biggest and worst lie of all, because it`s
the central issue facing us, is that he`s not going to cut taxes for rich
people. I`ve seen him on tape five times saying -- saying he`s going to
give a 20 percent across-the-board tax cut to everyone, the top bracket
will go from 35 percent to 28 percent.

Well, that`s the richest people in the country. What in God`s name is
he talking about? He`s giving people who make $2 million or $3 million a
year a quarter of a million dollar tax cut. That`s his plan. It`s the
Ryan budget. He said he would sign the Ryan budget. It`s the Romney plan.
He`s said it four or five times that I have seen on tape.

It`s a bald-faced lie, and he got away with it last night. He got
away with it because the president was very tepid in the way he called him
on it. And -- what the president should have said is, Come on, Mitt, I`ve
seen you on tape five times saying you`re going to cut the tax rate for
everyone by 20 percent. That means the richest Americans are going to get
their rate down from 35 percent to 28 percent. How can you stand there and
lie to the American people?

I mean, you`ve got to play hardball. That`s the name of the show.

(CROSSTALK)

RENDELL: Go ahead, Ron.

REAGAN: Lying is exactly what he was doing there. I didn`t mean to
interrupt, Governor, but lying was exactly...

RENDELL: No, no. Go ahead.

REAGAN: ... what he was doing. The pre-existing condition one was
the most shocking to me. The fact is, his plan does not cover pre-existing
conditions for people who don`t have insurance already. He pretended that
it did. That`s just a lie! What, does he not know about his own health
care plan?

(CROSSTALK)

MATTHEWS: OK, why didn`t the president say that? Let me just tell
you this. There is one advantage to doing this show every night, you guys
commenting on it every night. We`re up to date. There are a couple things
I don`t know if the president was up to date on.

Did he know that Mitt Romney had said, basically, I`m not going to
cover people unless they already have a policy from a private insurance
company for a preexisting condition? Does he know that as recently as a
few weeks ago, the president (SIC) said, If you`re a -- don`t have health
insurance, we`re going to send you -- we`re not going to let you die in
your apartment -- that was his phrase -- we`ll get you to the emergency
room?

He admitted he didn`t have a health care plan! And then he gets on
last night -- why didn`t the president say, Wait a minute, on "60 Minutes,"
didn`t you just tell Scott Pelley, blah, blah, blah? Didn`t you just say
this the other day? Didn`t you say this to David Gregory and have
Fehrnstrom correct it afterwards?

Why didn`t he call him on the day-to-day stuff? You on this,
Governor. Why isn`t he up to date to fight this guy? This is day-to-day
battle.

RENDELL: Well, I believe he must have been prepped on that stuff,
Chris. That`s what the whole exercise is for. When you do a debate, they
give you reams of paper about everything your opponent said on every
issue...

MATTHEWS: Yes.

RENDELL: ... everything you have said in the past on every issue. He
must have been prepped on it.

But for some reason, he decided not to correct and not to attack,
except in this sort of scholarly way like a law professor, which left a lot
of Americans cold.

MATTHEWS: OK, what do you think...

RENDELL: I mean, even when...

MATTHEWS: ... the strategy was? What was his strategy, Governor?
Must have been something that his guys like Axelrod and Plouffe were all
putting into his ear, when the guys with the towels over their shoulders in
the corner -- what were they saying for him they thought he ought to do in
there?

RENDELL: Big lead...

MATTHEWS: What`s John Kerry saying?

RENDELL: ... make no mistakes -- make no mistakes, number one.
Number two, preserve your likability, so don`t be too aggressive and don`t
beat up Mitt Romney too badly.

But it`s a confounding strategy. It never works. Chris, when have
you seen the prevent defense work?

MATTHEWS: No.

RENDELL: Never.

MATTHEWS: Richard Nixon tried it and Richard Nixon got blown away.

Anyway, the president seeped to have regained a bit of his fighting
spirit today. Good for him. Here he was at a campaign event right there
in Denver.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: When I got onto the
stage, I met this very spirited fellow who claimed to be Mitt Romney.

(LAUGHTER)

OBAMA: But it couldn`t have been Mitt Romney because the real Mitt
Romney has been running around the country for the last year promising $5
trillion in tax cuts that favor the wealthy. The fellow on stage last
night said he didn`t know anything about that.

Governor Romney may dance around his positions, but if you want to be
president, you owe the American people the truth.

(CHEERS AND APPLAUSE)

(END VIDEO CLIP)

MATTHEWS: The trouble is, 58 million people -- we`re just told by
Nielsen -- 58 million, that`s the preliminary estimate, guys -- watched
last night. That was an audience we`ll probably never see again, and he
has now had to go out there...

RENDELL: Yes, and probably two million...

MATTHEWS: ... and retail this thing.

RENDELL: ... Chris -- two million will see what he said today. But
can you imagine if he had said on stage last night and said, Hey, who is
this fellow I`m debating? It can`t be Mitt Romney. Mitt Romney`s been
going around saying he`s giving everyone a 20 percent tax cut. It would
have been a killer of a line, a killer of a line! Where was it?

MATTHEWS: Yes. Ron, this thing about -- I`ve had a theory expounded
to me, and your dad was involved in the theory, that presidents, once
you`ve heard "Hail to the Chief" about four years, it`s very hard to get up
for a debate. And this was true with George, Sr., George, Jr., and
President Reagan.

Ed Rendell, do you think there`s a problem with being an incumbent?

RENDELL: Yes, there is because you`re not challenged all the time,
for sure. But also, if you`re an incumbent -- and I know President Obama
believes that he`s done many good things for the country. Show some
passion, defend yourself.

MATTHEWS: Yes, I agree.

RENDELL: He didn`t do that.

MATTHEWS: I agree. I agree.

RENDELL: I mean, he let Governor Romney just go through this litany.
Don`t you agree, Ron? Your father was...

(CROSSTALK)

MATTHEWS: Hold on. Thank you. Go ahead, Ron.

REAGAN: Yes. The analogy to a prevent defense is exactly the one.
You know, in politics, if you`re not winning, you`re losing. You`ve got to
stay on offense. You`ve got to keep pushing all the way through. And he
just didn`t do that.

RENDELL: Absolutely.

MATTHEWS: We got a pretty good reading on you guys tonight -- by you
guys. Thanks so much, Ed Rendell, and thank you, Ron Reagan, as well.

Coming up: The day after. Romney said a lot of things last night that
sounded good but were factually -- well, inaccurate. I hate the word
"lie." Inaccurate -- let`s put it that way, my way. If the president`s
team can make that case, they can win the aftermath, even if Mr. Romney
(SIC) lost the performance battle last night.

Plus, what`s wrong with this picture? The president looking down at
his notes is just one of the many images that made last night such a rough
one for the president. The great James Lipton (ph) of "Inside the Actors
Studio" joins us for a review of the theater of politics last night.

Who turned out to be the biggest winner of last night`s debate? Well,
you might think it`s this guy, but in fact, it may be this guy, Big Bird,
who lives on "Sesame Street." Big Bird began trending, by the way, on
Twitter just moments after Romney said he`d cut off his funding. I guess
Romney considers Big Bird a 47 percenter, a sloucher.

"Let Me Finish" tonight with my day-after review of how that debate
could have gone the other way.

This is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: With, the first debate in the books, President Obama and
Mitt Romney are back on the campaign trail today. The president left
Colorado today and traveled to Wisconsin, then on to Virginia and Ohio for
Mr. Romney. (SIC) Mitt Romney campaigns in Virginia and then Florida.
Monday, he`s expected, as he said, to start filling in the policy details
with the first of several speeches, starting with foreign policy.

We`ll be right back.

(COMMERCIAL BREAK)

MATTHEWS: Welcome back to HARDBALL. Last night was a tough night for
the president, of course, but there`s another story to be told about Mitt
Romney`s performance, which relied on fuzzy math, vague policy
prescriptions and statements that strained the truth. I`m being nice here.

Like when he denied his tax plan would cost $5 trillion. Denied it.
Independent economists say that it is, indeed, the case, $5 trillion cost
to the economy. "The New York Times" editorial today, they got out
overnight, says the following, "Virtually every time Mr. Romney spoke, he
misrepresented the platform on which he and Paul Ryan are actually
running." That`s quite a statement.

And in "New York" magazine, Jonathan Chait challenged Romney over his
economic plan that seems to rely on some magical numbers and thinking,
quote -- I love what he says here, Jonathan Chait -- "So Romney is a
candidate of a 20 percent tax cut -- tax rates -- a new plan to cover
people with pre-existing conditions and higher defense spending, and he
will accomplish it all by eliminating federal funding for PBS."

Well, the question is, can Obama and his team win the post-debate
debate by highlighting some of this nonsense and Romney`s fuzzy language
here?

Willie Brown is the former mayor of San Francisco, former speaker of
the house out there. And Joan Walsh is editor-at-large for Salon and the
author of "What`s the Matter With White People?"

I want to get to these points. But Mayor, your thoughts up front.
Can you win on the facts, having lost, perhaps, on performance value?

WILLIE BROWN (D), FORMER SAN FRANCISCO MAYOR: It`s very, very
difficult to get people in the world observing politicians to ever come to
the substance. They always go for style. They always are influenced by
performances.

And I believe that Mr. Obama took a licking last night. The public
knows that. And now to suggest that the facts support what his position
was supposed to be I don`t think carries.

MATTHEWS: You know, I got to ask you a personal question about the
president. You know, I do look up to him in so many ways. And when I`m
with him, I just say to myself -- and I do this really objectively, I
think. I look at him and listen to him after he`s briefed us on something,
This guy ought to be president. He has the command of the issues. He has
scope. He has relevance. He can talk to you as a regular person in common
English, as well as the wonk talk. He`s got an IQ that just be up in the
100-and-whatever range, way up there.

And yet last night, he was tongue-tied. He let the other guy own the
room. What do you think was on his mind -- before we get on to Romney --
because I know you think a lot about this and care a lot, Mayor?

BROWN: Well, what I think happened last night is I think Barack
Obama, frankly, went to sleep. He had anticipated being perceived as
arrogant, being perceived as a genius, being perceived as taking advantage
of a lesser. And he decided to back off of all of that.

In the process, however, he forgot to continue to think. And at each
point where there needed to have been somebody calling to the world`s
attention the inadequacies in the presentation being made by Mr. Romney,
the inaccuracies therein, he should have done that, and it would not have
been inconsistent with his being what he is supposed to be.

But he didn`t do that. He literally became no longer interested in
what Romney was saying. He stayed with his programmed, planned
presentation no matter what Romney said. And that was a major mistake.

MATTHEWS: It makes you believe in spying and how it`s done, Joan,
because here is a guy that came on television last night with 60 million
people roughly watching convincing us he had crocodile tears, real tears
for people on Medicare...

JOAN WALSH, MSNBC POLITICAL ANALYST: Yes.

MATTHEWS: ... real people with problems. They`re worrying about
keeping Social Security -- when we have him on tape telling people who paid
$50,000 a head to find out what he really thinks, say...

WALSH: Right.

MATTHEWS: ... say, I don`t give a damn, I don`t give a rat`s behind
on these 47 percent who are a bunch of freeloaders and parasites.

You know, he said that on the record when he thought nobody was
watching. And then last night he has case after case of Mrs. Munchkin I
met here and Mr. Brown I met here and Ms. This, all these cases where he
got deeply and emotionally concerned.

It`s a performance. But maybe he worked. What do you think? And
will he will be able to work it over time now? He`s got five weeks left.

WALSH: He did have a very good job. I just have to say that. He was
prepped very well.

And It reminded me that he`s Mr. Bain Capital. The most important
thing to that man is closing a deal. He will say anything to close a deal.
And we saw that last night, Chris. I don`t -- he was hopped up. He was on
some kind of sugar high.

MATTHEWS: That`s what I kept asking. I said he`s LDS. He couldn`t
be on anything like caffeine. So what would he -- was it M&Ms?

WALSH: Spaghetti and barbecue. I don`t know. I heard a lot of
things about what he ate, but it was like a sugar high where you come down
the next day and you crash.

And I`m going to take a little -- I completely agree with the mayor
about the president`s job. But in terms of whether you can win a second or
a third day news cycle, I think the president is already coming back. And
just traveling home today from the debates, just every place I saw a TV
monitor, somebody was fact-checking Mitt Romney`s lies.

MATTHEWS: Yes.

WALSH: And I will call them lies. You`re too nice, but you let me
say what I think. They`re lies.

MATTHEWS: Well, It doesn`t work because once you saw lie, then the
argument is over.

Mayor, let`s go look at this. Last night, Romney said the tax plan
wouldn`t cost $5 trillion and wouldn`t benefit the wealthy people at the
expense of the middle class. Take a look at him actually saying this.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I`m not looking for a $5
trillion tax cut. What I have said is I won`t put in place a tax cut that
adds to the deficit. That`s part one.

Number two, I will not reduce the share paid by high-income
individuals. And number three, I will not under any circumstances raise
taxes on middle-income families. I will lower taxes on middle-income
families.

(END VIDEO CLIP)

MATTHEWS: He`s going to get rid of the estate tax, Mr. Mayor, which
aims directly at the top rate, the people who have a quarter billion bucks
on them and want to leave it to their kids. Fair enough. But it`s for the
very rich. He wants to lower the top rate from 35 percent to 28 percent
for the richest people in the country.

He wants to take the corporate rate from 35 percent down to 25
percent. And he has the cojones, whatever you call them, to stand there in
front of 60 million people and say, I`m not going to do it.

BROWN: Well, clearly at that stage Mr. Obama should have turned to
him and said you are not telling the American people the truth, just as he
did today in Denver when he said he wasn`t telling the truth.

He should have looked him in the eye and said, Mitt Romney, you are
not telling the American people the truth, and then proceed to walk through
as Clinton would have done the mathematics to prove it.

I don`t think Romney would have been smart enough to figure out how to
get out of that hit. But Obama ignored that opportunity and I think that`s
a mistake.

Joan, you`re correct. He will -- everywhere he goes, he will save the
day and correct what he didn`t do last night, but 58 million people will
not be able to be contacted in time for him to make that correction.

MATTHEWS: Well, Joan, last night Romney made another surprising
statement on his health care plan this time. Let`s take a look at the
latest variation on a theme which is, I`m not as bad as I am. Anyway,
let`s watch it.

(LAUGHTER)

(BEGIN VIDEO CLIP)

JIM LEHRER, MODERATOR: Let`s get the governor explain what you would
do it Obamacare is repealed. How would you replace it?

ROMNEY: Well, actually, it`s a lengthy description,but, number one,
preexisting conditions are covered under my plan. Number two, young people
are able to stay on their family plan.

(END VIDEO CLIP)

MATTHEWS: Well, there`s a lie. Just keep it simple. I reserve my
right to use it once in a wile. It`s in their there.

His own guy came out afterwards and said -- Fehrnstrom said it`s not
in there.

WALSH: Right.

MATTHEWS: Anyway, Talking Points Memo reported that Romney`s top
adviser, Eric Fehrnstrom, as I said, of Etch A Sketch fame -- he`s the one
that came up with that phrase -- admitted that Romney`s plan to cover
everyone with preexisting conditions wasn`t as cut and dried as Romney
suggested.

In other words, Fehrnstrom said -- quote -- "With respect to
preexisting conditions, what Governor Romney has said in the past is for
those with continuous coverage, he would continue to make sure that they
received the coverage."

In other words, if you have coverage for preexisting condition, you
would still have it.

WALSH: Right.

MATTHEWS: But he doesn`t guarantee it like the Obama plan does it.
He doesn`t do anything like he pretends to do here.

WALSH: No, he doesn`t.

In that -- now I`m going to be the one jumping on the president,
because that was another area where he got really professorial and he kind
of explained that, but he didn`t say, look, Governor Romney, the problem is
not for people who have continuous coverage. The problem is for people who
have been dropped and are trying to get back into the job market and are
trying to get insurance again and they can`t. Your plan does not do that.

He did not come -- he came with the facts, but he didn`t come with the
simple approach of how to hit Romney with the facts, when we know that this
is a lie that he tells over and over and over again.

MATTHEWS: OK.

(CROSSTALK)

BROWN: Let me defend Romney just a little bit.

WALSH: OK.

BROWN: You have got to understand that Mr. Romney believed what he
said. This is a man who is unfamiliar with reality, and, therefore, he can
stand there with passion and proceed to say what he said, and for him it`s
not a lie. He really believes.

(CROSSTALK)

MATTHEWS: But on "60 Minutes" with Scott Pelley, he laid out the
fact. Here`s his health care plan: "We don`t let people die in their
apartments," like the only people without health care live in apartments.
I get that one.

"We get them to the E.R." That`s his health care plan. He laid it
out for Scott. And now he`s coming off as the guy who cares about the
little people. He doesn`t. He calls them the 47 percent. He doesn`t care
about them.

Anyway, thank you. Thank you very much, Mayor Brown and thank you,
Joan.

Up next, the biggest winner in last night`s debate might have been Big
Bird. A little comic relief coming up here in the "Sideshow."

He began trending by the way on Twitter when Mitt Romney threatened to
cut off his funding.

This is HARDBALL, the place for politics.

(BEGIN VIDEO CLIP)

OBAMA: He said that he doesn`t even know that there`s such laws that
encourage outsourcing. He`s never heard of them. He said that if it`s
true, he must need a new accountant. We know for sure it was not the real
Mitt Romney, because he seems to be doing just fine with his current
accountant.

(LAUGHTER)

OBAMA: Thank goodness somebody is finally getting tough on Big Bird.

(LAUGHTER)

OBAMA: It`s about time. Elmo, too?

(LAUGHTER)

OBAMA: It will be interesting to see what the guy who was playing
Mitt Romney yesterday will say about foreign policy when we meet next.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

ROMNEY: I`m sorry, Jim, I`m going to stop the subsidy to PBS. I`m
going to stop other things. I like PBS, I love Big Bird. I actually like
you, too. But I`m not going to -- I`m not going to keep on spending money
on things to borrow money from China to pay for it.

(END VIDEO CLIP)

MATTHEWS: Well, back to HARDBALL.

Probably not a good thing, but coming out of last night`s debate, a
lot of people are just thinking about Big Bird`s lack of job security. Big
Bird played no small role in what turned out to be the most tweeted about
political event in U.S. history.

That was last night. Just his name was generating over 13,000 --
actually 17,000 tweets per minute at one point. From one of the many Big
Bird-related accounts, here it comes -- quote -- "If Romney wins this,
could be me." There`s a sorry sight there, an extremely downtrodden Big
Bird. There you see it.

But then he put it in perspective with -- quote -- "Geez, at least
it`s mitt. Newt would have sent me to the moon colony" -- or a moon
colony.

What happened when Sesame Street`s other residents caught wind of
Romney`s remark? This: "Mitt Romney wants to cut PBS funding. Well,
`blank` just got real."

Anyway, the PBS president called the post-debate focus on Big Bird --
quote -- "unbelievable and stunning."

Well, here is a question. What does learning to make a souffle have
to do with a debate? Well, a whole lot, if you ask comedian Lewis Black.

(BEGIN VIDEO CLIP)

LEWIS BLACK, COMEDIAN: Two minutes they have to speak, two minutes.
Do we have really the attention span of a gnat? Two minutes to tell us
about the economy, about the medical thing, about Social Security. Two
minutes?

It`s ludicrous. We should be forced to sit there. You can`t explain
anything in two minutes. You can`t explain how to do a souffle in two
minutes.

(LAUGHTER)

(END VIDEO CLIP)

MATTHEWS: I love that guy, Lewis Black.

Anyway, as for naming a clear winner?

(BEGIN VIDEO CLIP)

LEWIS: You could say Romney won it because he looked mildly more
alert.

(LAUGHTER)

LEWIS: But I don`t -- nobody -- I don`t think anybody out there --
I`m pretty bright. I don`t really know what they`re saying. It sounds
like English. I know it`s English, but it doesn`t come through.

(END VIDEO CLIP)

MATTHEWS: Anyway, comedians can say what they want. Any of them can
say what they want as long as it`s funny, and he is.

I think last night`s weren`t in doubt, the results.

Now to something you may have missed because of the debate, a history-
making moment for the Washington Nationals` traditional presidential mascot
race. Teddy Roosevelt had never won, had lost more than 500 races, when
this happened yesterday on the final day of the regular season.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: They`re through the right field corner. Wait!
Oh, the fake Phanatic took out the presidents. All three are down.

UNIDENTIFIED MALE: Teddy, it`s time to make your move! It`s Teddy
and the fake Phanatic! Teddy is on the outside. The fake Phanatic is on
the inside. Winner is going to be Teddy!

(END VIDEO CLIP)

MATTHEWS: I have never understood why he lost all the time. There
you have it. Washington, Jefferson, and Lincoln are taking down by a fake
Phillies Phanatic. And Teddy scores his first win since the 2006 inaugural
race. Twitter was hopping with that one, too, from John McCain, who gave
teddy a pep talk about his performance earlier in the week.

Quote: "Teddy won, Teddy won, Teddy won. We have defeated the massive
left-wing conspiracy." He`s kidding.

From a sports reporter: "Teddy`s losing streak lasted 538 games, or
the number of votes in the Electoral College.` That`s so D.C. It sure is.

Much more ahead, including the great James Lipton, is going to be
grading the debate performances of both President Obama and Mitt Romney
last night. He`s the best.

You`re watching, HARDBALL, the place for politics.

(COMMERCIAL BREAK)

HAMPTON PEARSON, CNBC CORRESPONDENT: I`m Hampton Pearson with your
CNBC "Market Wrap."

The Dow gains 82. The S&P rises 10 and the Nasdaq is up 14 points.

Minutes from the last Federal Reserve meeting show all Central Bankers
but one were in agreement about the Fed`s latest round of bond buying. As
for the economy, jobless claims rose a smaller-than-expected 4,000 last
week to 367,000, and tomorrow`s jobs report is on Friday, of course.
Payrolls are expected to rise by 113,000, with the unemployment rate moving
up to 8.2 percent.

That`s it from CNBC, first in business worldwide -- now back to
HARDBALL.

MATTHEWS: Welcome back to HARDBALL.

Of course, we will be looking for that jobless number tomorrow.

Now we have an update on the story we brought you Monday. If you
recall, we reported that Republicans who had been on a witch-hunt to root
out so-called voter fraud out there may have finally found some in their
own ranks.

The activities of a firm hired by the Republican National Committee to
register voters in Florida is now the subject of a criminal probe. It
turns out Florida authorities found enough evidence of suspicious voter
registration down there by that firm to warrant a full-blown criminal
investigation.

The RNC hired the same questionable firm, by the way, to do voter
registration work in four other key swing states, Nevada, Colorado,
Virginia, and North Carolina. All those states have fired the firm now and
so far Florida is the only state to open a criminal investigation of it.

Judith Browne-Dianis is co-director of the Advancement Program, which
watches some of this stuff going on. And Michael Isikoff is an NBC News
national investigative correspondent.

First of all, when you go out and you have phony lists, and you start
presenting phony lists to RNC or anybody else, that`s a criminal matter
apparently.

JUDITH BROWNE-DIANIS, CO-DIRECTOR, ADVANCEMENT PROJECT: Yes, this is
serious.

And the Florida Department of Law Enforcement is going to look into it
because this is voter fraud. This is voter registration fraud, and it
actually also shows that we already have laws in place to prevent voter
fraud, and, in fact, the state is going to go after them, and that`s good.
That`s what they should be doing.

MATTHEWS: Give me a damage report on what would happen if this guy --
if these people got away with what they`re doing. How does it hurt our
democracy, this kind of corruption?

BROWNE-DIANIS: Right. It hurts -- well, what would happen is -- I
mean, really, you know, we know at the end of the day they wouldn`t be able
to vote actually, because, again, we have laws in place that wouldn`t
permit them to vote.

MATTHEWS: But they`re showing up on registration lists and where do
they end up going?

BROWNE-DIANIS: Well, what would happen is actually this is a fact
that, you know, technology allows for them to be knocked out, and that kind
of fraud is not going to happen.

But we have a problem with people trying to conjure up people that
they want to vote Republican. And important is that this particular
company had allegations before in 2004 about registering people and
throwing away Democratic registration forms.

MATTHEWS: OK. I want to get to you, Michael, about the role of the
RNC. Nobody knows who this Sproul guy is. He`s just a person who is doing
some stuff that is questionable.

But why is the RNC dealing with a guy who is so notorious or
suspicious that they don`t use his name? They -- they hire people to go
around him. They -- they cushion themselves

MICHAEL ISIKOFF, NBC NEWS NATIONAL INVESTIGATIVE CORRESPONDENT: Well,
first of all, he`s a pretty known commodity, particularly in Arizona. He`s
been a very controversial figure there. He`d been executive director of
the Arizona Republican Party, before that executive director of the
Christian coalition in Arizona.

He had, in fact, been involved in voter registration allegations in
2004 when he had been paid millions of dollars by the RNC and was -- and
there were accusations people working for him this thrown away registration
forms in which people were registering Democrats.

Now, this led to an FBI --

MATTHEWS: So they were screwing people who were trying to vote?

ISIKOFF: That was the allegation.

MATTHEWS: Yes.

ISIKOFF: There were multiple allegations along those lines. There
was an FBI investigation. No charges were filed but --

MATTHEWS: That explains why the RNC would not want his name on their
docket or close to them, right?

ISIKOFF: Right. And I should say, you know, there continued to be
allegations about him. Just last year, there was allegations about a
recall petition in a town in Arizona in which he was linked --

MATTHEWS: OK. We`re going to keep up with this, Michael, because
you`re great and because you`re great, also. Because I love the irony of
the fact that the Republicans have been yelling about fraud, there they got
caught with their own problem and it`s a serious one, a criminal one.

JUDITH BROWNE-DIANIS, ADVANCEMENT PROJECT: Again.

MATTHEWS: Anyway, thank you very much, Judith Browne-Dianis and
Michael Isikoff.

Up next, President Obama spent a lot of time in last night`s debate
looking down at his notes. And it didn`t look very good. There he is on
that split screen.

He must have known about -- well, the great James Lipton joins us for
a review of how the actors perform. They were actors in last night`s
theater of politics.

This is HARDBALL, the place for politics and theater tonight.

(COMMERCIAL BREAK)

MATTHEWS: I`ve got some new poll numbers in some key Senate races
today. Let`s check the HARDBALL scoreboard.

In Connecticut, a new Quinnipiac poll shows Republican Linda McMahon
with a one-point lead over Democrat Chris Murphy in that Senate race for
the seat currently held by Joe Lieberman. It`s McMahon, 48 percent,
Murphy, 47 percent. I think she just went ahead.

In Missouri, a new PPP poll shows Senator Claire McCaskill now, I
like this lead, six points over Republican Todd Akin, 46-44 -- explained by
the fact that libertarian candidate has got nine. That`s valuable
information there.

Look at this, in Arizona, a new PPP poll there shows Democrat Richard
Carmona, the former surgeon general of the United States, leading
Congressman Jeff Flake by two in the race to replace Senator Jon Kyl. It`s
Carmona, 45, Flake, 43. I guess Flake is not a good name for a candidate.

Anyway, we`ll be right back.

(COMMERCIAL BREAK)

MATTHEWS: We`re back.

If politics is theater, it is certainly. A presidential debate is
one of its highest forms.

And who better to analyze last night`s drama than James Lipton, host
of "Inside the Actors Studio" on Bravo. He joins me now.

Well, last night`s opening statements set the tone for the debate and
Mitt Romney came right out of the gate with -- get this -- a joke. Let`s
watch.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Twenty years ago, I
became the luckiest man on Earth because Michelle Obama agreed to marry me.
And so I just want to wish, sweetie, you happy anniversary and let you know
that a year from now, we will not be celebrating it in front of 40 million
people.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Congratulations to you, Mr.
President, on your anniversary. I`m sure this was the most romantic place
you could imagine here with me. So I --

(LAUGHTER)

ROMNEY: Congratulations.

(END VIDEO CLIP)

MATTHEWS: That was -- I hate to say it -- charming.

JAMES LIPTON, "INSIDE THE ACTORS STUDIO"/BRAVO: Yes.

MATTHEWS: James --

LIPTON: Yes.

MATTHEWS: -- where did that come from?

LIPTON: It came from Mitt Romney. He`s rather notorious for telling
jokes that go over like lead balloons. This one did not. He finally found
his groove as far as a comedian is concerned, at least for that moment.

MATTHEWS: Let`s talk about the president. He was the one I think
that was the base of most consternation. You know, he was looking down a
lot.

Did he know -- and what did you think about the fact of that split
screen? There we are watching it now. We never didn`t see the split
screen, it seemed, that he was pretty much ignoring it.

LIPTON: Unfortunately, he made the mistake that was made once before
with a lot of large and loud sighs if you`ll recall it.

MATTHEWS: Yes, Al Gore.

LIPTON: He should have been aware he was on camera. He seemed not
disinterested, which would mean objective, but uninterested. And he looked
as if he really would rather be somewhere else. That`s very
uncharacteristic of him and very dangerous, and that`s what the split
screen can do to you and it shouldn`t have happened, as everybody has been
saying all day long.

MATTHEWS: Well, it was as if he was saying to himself, this, too,
shall pass.

LIPTON: And that it can`t pass as quickly -- it can`t pass quickly
enough.

MATTHEWS: Yes.

Well, anyway, in clear contrast Governor Romney seemingly took Obama
-- kept looking him in the eye, almost to confront him in a way in a
cultural statement like "I`m your equal, buddy". That must have -- do you
think that bothered Obama as a professional, he just couldn`t take that
gaze we`re looking at there?

LIPTON: I don`t know.

MATTHEWS: Eye to eye?

LIPTON: I don`t know. I don`t know if that bothered him or not.
All I know is that he was talking -- I don`t know to whom he was talking.
He seemed to be staring out in space, whether he was talking to Lehrer or
to the audience, but he was not talking directly into the camera, which is,
of course, us, which is the audience out there.

MATTHEWS: Yes.

LIPTON: And that`s what they`re supposed to do. He certainly didn`t
do that.

There are only two places he could go, either into the camera, I
think, or to his partner, to the person with whom he`s debating. He should
have been looking at his partner or he should have before looking into the
camera. The rest of it was a waste of time and of energy and made him
look, I think, insufficiently interested in the moment.

We say -- in acting, we say that we have to be -- we have to find
ourselves in the moment, and he was not in the moment. And interestingly
enough, Mitt Romney, whom I accused in my first article that I wrote about
this, how to act human, of being unable to relate to the public, was in the
moment, for the first time. He found himself in the moment.

Look, ever since I wrote that article I have been looking for the
real Romney. I finally decided that he was -- maybe the real Romney was
that boss that tells lame jokes at which we`re obliged to laugh at peril of
our jobs -- maybe that was him. But that wasn`t the person who showed up
last night.

MATTHEWS: No.

LIPTON: Not at all.

MATTHEWS: He reminded me of the way actors like a guy like Russell
Crowe I have met a couple -- I met him once in an interview. He seemed
like a regular guy from a street corner, sort of a regular guy. When you
see him in the movies, he`s playing the master and commander and a
gladiator, big -- a big presence, a grand being. Romney seemed to
transfigure himself that way last night.

LIPTON: What he did was remarkable. Think about it for a moment,
Chris. He walked out on the stage and fired the moderator.

Not only did he fire the moderator, he fired --

MATTHEWS: He fired Big Bird.

LIPTON: He fired Charlie Rose. He fired Kermit the Frog for God`s
sake.

MATTHEWS: Let`s watch him do that. Watch him do it. In one of the
more memorable lines from last night Romney made, let`s move a prompter and
I`ll be able to see it. He made a straight shot at the moderator, PBS`s
Jim Lehrer. Let`s watch.

(BEGIN VIDEO CLIP)

ROMNEY: I`m sorry, Jim, I`m going to stop the subsidy to PBS. I`m
going to stop all the things -- I like PBS. I love Big Bird. I actually
like you, too. But I`m not going to -- I`m not going to keep spending
money on things to borrow money from China to pay for it.

(END VIDEO CLIP)

MATTHEWS: Wow.

LIPTON: Chris, remember what he told us, he warned us a long time
ago, we should have listened, he said he liked what? Firing people.

MATTHEWS: Firing people.

LIPTON: And he came out on the stage and demonstrated it for us. He
was having a wonderful time. He relished it, every moment of it.

This is what we used to do at Bain Capital. This is how we made a
lot of money. And this is what I`ll do even when I`m president. It`s
easy. Just like that and he fired --

MATTHEWS: Did he seem like he`s the boardroom chair? He walked into
the boardroom. Put down his papers and took over the room as if there
didn`t need to be anybody else in the room except employees, some of whom
won`t be employees much longer. It`s dominant performance.

Again back to the president. What do you think was going on in his
head? You said you have to be in the moment.

I would have been terrified if I were the president thinking how did
this person, this not really great governor, this guy who was not really a
person in so many ways politically, how is he dominating this air space
right now, how can that be happening?

LIPTON: It could happen. It could happen on stage, it could happen
in front of a camera. There are people who have that ability.

I thought that President Obama had that ability. And I assume I
think a lot of us assumed that`s what was going to happen last night. It
didn`t.

MATTHEWS: OK. Here`s --

LIPTON: It turned out that Romney reached inside and found somewhere
inside himself this person. Now, this person already existed. You`re
right, I think, this is the president of Bain Capital. This is how they
operate. And this is what he did.

And what happened was I think you used the word bystander, an
observer. The president became an observer, sat there, stood there
listening.

MATTHEWS: OK. But even in the instruction manual, even in the
director`s signals, what you`re supposed to do -- they were told, prepare a
closing statement.

President Obama`s closing statement, the last opportunity to set the
viewers straight on the impressions of (INAUDIBLE) fell flat compared to
Governor Romney`s. Let`s watch the difference.

(BEGIN VIDEO CLIP)

OBAMA: You know, four years ago, I said that I`m not a perfect man
and I wouldn`t be a perfect president and that`s probably a promise that
Governor Romney thinks I`ve kept. But I also promised that I`d fight every
single day on behalf of the American people.

ROMNEY: I know this is bigger than an election about the two of us
as individuals. It`s bigger than our respective parties. It`s an election
about the course of America. I will keep America strong and get America`s
middle class working again.

(END VIDEO CLIP)

MATTHEWS: That was a victory speech and a concession speech, side by
side.

LIPTON: Yes, the president of the theater guild once taught me a
lesson about writing plays. He said, Jim, the most important two minutes
of your play, never mind everything else, is the last two minutes before
the audience goes out to intermission. That`s what they`ll remember, those
last two minutes.

And those last two minutes last night were a disaster for the
president and a triumph for Mitt Romney. The president seems listless and
anxious to get it over and he seemed unprepared.

And what`s more, he seemed to be going back to his stump speech. We
were listening to the cliche of the day, the platitude du jour.

MATTHEWS: I agree with you.

LIPTON: He had so -- he had at least the time to prepare something
that came from the heart. This guy -- we have been criticizing, all of us
I think here have been criticizing Romney for not speaking from the heart.
Last night, the positions were reversed. He did speak from the heart.

Now, was that the real Romney or will another Romney turn up?
Remember, he`s been discarding personi the way a snake discards skin. It`s
easy for him. He`s been shifting gears constantly during this campaign.

MATTHEWS: Please come back, James. You`re the best guest we have.
Thank you so much.

This is so much about what`s going on last night. It was comparing
acting performances. I know our deep intellectuals don`t like hearing
that. So much of last night was performance.

When we are return, let me finish with the big opportunities
President Obama missed in last night`s debate that he can still catch up
on.

You`re watching HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Let me finish with last night`s disaster.

You get nowhere in life by not realizing what`s done is done.
President Obama was not prepared for his huge debate with Governor Romney.
This isn`t about left, right, good or bad. It`s about coming to work to
work.

His challenger did. He took command. He took charge of that stage,
issuing orders to moderator and rival al like. He owned that platform,
opened all within the sound of his voice. It was impressive, powerful and
must have been just horrible to feel the smothering, all-involving
sufficiency of the thing. With Romney in the room, there didn`t need to be
anywhere else.

So I`m not here to slam Obama for a hard night. My concern -- and
that`s what it is -- is his readiness to skip the politics of this
campaign. There`s no excuse for a Democratic leader to think of himself
excuse from politics. And today, that means mastering the 24-hour clock.
Back and forth of politics, the war room stuff that gets you elected,
protects you from being destroyed, either on the way to public officer or
once there.

Simple question: Did the president know he was allowed to mention, in
fact champion his saving of American auto industry last night? Did he know
he was allowed to interrupt the pissant conversation about PBS funding to
say, excuse me, let`s talk the big stuff, I rescued the American auto
industry and the hundreds of thousands of jobs working for it.

You sir were willing to have it go bankrupt. Did Obama know he could
interrupt his rival`s expressions of concern for Social Security folk with
the news that his rival tells his wealthy backers behind closed doors
something very different, how he sees people who rely on Social Security as
parasites?

Did Obama know he could interrupt Romney`s weeping for Medicare with
a timely reminder that he, the man standing there with him, wants to give
80-year-old vouchers and send them out to fetch a health insurance policy?

One last pair of questions. Did the president know that Mitt Romney
just said that we don`t let people die in their apartments, we take them to
the emergency room, that that is his health care plan? Did the president
know that Romney had said people who didn`t have continuing coverage
shouldn`t get covered for pre-existing conditions, that it was simply their
fault for not having paid up all those years?

Well, the whole thing -- the whole thing last night could have gone a
whole different way.

And that`s HARDBALL for now. Thanks for being with us.

"POLITICS NATION" with Al Sharpton starts right now.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY
BE UPDATED.
END

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